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. Last Updated: 07/27/2016

Alrosa Is Looking to Go Public Soon

JERUSALEM -- State diamond monopoly Alrosa is looking to go public soon, the company's president, Sergei Vybornov, said Thursday.

Alrosa, the world's largest diamond firm after De Beers, produces more than one-quarter of the world's diamonds. It also controls 97 percent of all Russian diamond output and has operations in Angola.

"In the nearest future, Alrosa intends to become a public company," Vybornov told a diamond conference in Jerusalem.

He did not give any further details or a timetable regarding the planned offering.

"The market regulation system, the structure of supply, demand and pricing are going through changes, and new players are coming on board," Vybornov said.

He said President Vladimir Putin's decree to cancel export quotas for rough diamonds would change existing trade rules.

Putin signed a decree in January allowing unlimited exports of platinum group metals, uncut diamonds and other precious metals and ores, subject to a license from the Economic Development and Trade Ministry.

Analysts said the elimination of long-term quotas was a step toward Russia's planned accession to the World Trade Organization.

"We plan to sell most of our goods using the single market in Russia, which calls for establishing all the required infrastructure, including ensuring an efficient customs clearing service, [and] trade finance," Vybornov said.

While Alrosa's sales to De Beers had declined, Vybornov said the company planned to increase its participation in joint projects aimed at boosting the demand for natural diamonds.

"We look forward to developing cooperation with De Beers in the area of mining, geological prospecting, and improving mining and processing technologies," he said.

De Beers is 45 percent owned by mining group Anglo American.

Alrosa estimates its sales will remain flat at around $2.9 billion in 2007.

Vybornov also warned that the industry was not doing enough to curb the use of conflict diamonds. The so-called "Kimberley Process" requires certification to ensure that gems do not come from illegal trade that supports conflicts.

"The Kimberley Process is a first step, but it faces new challenges today," Vybornov said. "We do not know how many diamonds end up in the gray economy and are used by criminal and terrorist organizations."